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7 Reasons Why This Teladoc Health Analyst Is Turning Bullish

7 Reasons Why This Teladoc Health Analyst Is Turning Bullish

Teladoc Health Inc’s (NYSE: TDOC) pro-forma revenue growth and synergy targets appear achievable, according to Credit Suisse.

The Teladoc Health Analyst: Jailendra Singh upgraded Teladoc Health from Neutral to Outperform with a price target lifted from $225 to $249. 

The Teladoc Health Takeaways: The company formed by the merger of Teladoc Health and Livongo Health Inc (NASDAQ: LVGO) could generate annual revenue of around $5 billion, with annual EBITDA of about $1.1 billion in 2025, Singh said in the upgrade note.

The analyst named seven factors that are driving the upgrade:  

  • The combination of Teladoc and Livongo creates a health giant that is likely to beat the competition in virtual care, remote patient monitoring and chronic care management.
  • Singh expressed optimism regarding Livongo Health’s business model, offerings and growth prospects.
  • The merger is strategic, as it enables Teladoc to “generate incremental revenues from cross-selling the chronic care and disease management programs” to its 70-million-member base as well as “increase the stickiness of its employment/payer clients,” the analyst said. 
  • The compounded annual growth rate for the combined entity’s revenue is estimated at 30-40% over the next three years.
  • Upside exists to the estimated revenue synergy estimate of $500 million for 2025.
  • The cross-selling opportunity is underappreciated.
  • The valuations implied by the price target are “rich but justified,” Singh said. 

TDOC, LVGO Price Action: Shares of Teladoc Health were trading 7.59% higher to $201.73 at last check Monday. Livongo shares were 7.89% higher at $127.68.

Related Links: 

Telehealth Company MDLive Plans To Go Public Early Next Year, CEO Says

Benzinga's Top Upgrades, Downgrades For August 17, 2020

Latest Ratings for TDOC

Sep 2020DA DavidsonInitiates Coverage OnBuy
Aug 2020Credit SuisseUpgradesNeutralOutperform
Jul 2020Piper SandlerMaintainsOverweight

View More Analyst Ratings for TDOC
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Posted-In: Credit Suisse Jailendra SinghAnalyst Color Upgrades Health Care Price Target Analyst Ratings General Best of Benzinga

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